ResMed(RMD) - 2024 Q2 - Quarterly Report

Revenue Performance - Net revenue for Sleep and Respiratory Care products reached $1,017,855 thousand in Q2 2023, a 11$916,981 thousand in Q2 2022[11] - Total net revenue for the six months ended December 31, 2023, was $2,265,122 thousand, up 14.2$1,984,038 thousand in the same period last year[11] - Total net revenue for the company for the three months ended December 31, 2023, was $1,162.8 million, an increase of 12.5$1,033.7 million in the same period of 2022[51] - Net revenue for the three months ended December 31, 2023, was $1.2 billion, an increase of 12$1.03 billion for the same period in 2022[122] - Revenue from the Sleep and Respiratory Care segment for the six months ended December 31, 2023, was $1,980,892 thousand, up 12.4$1,761,424 thousand in 2022[30] - Software as a Service (SaaS) revenue for the six months ended December 31, 2023, reached $284,230 thousand, a 27.7$222,614 thousand in the prior year[30] - Net revenue from Software as a Service (SaaS) increased by 24% to $144.9 million for the three months ended December 31, 2023[125] - Net revenue from devices for the six months ended December 31, 2023 increased to$1,170.7 million, a 10% increase from $1,060.4 million for the same period in 2022[137] Profitability and Earnings - Gross profit for the three months ended December 31, 2023, was$646,934 thousand, compared to $579,715 thousand in Q2 2022, reflecting a 11.6$208,800 thousand, a decrease of 7.2% from $224,914 thousand in Q2 2022[11] - Basic earnings per share for Q2 2023 was$1.42, down from $1.53 in Q2 2022[11] - The gross margin for the three months ended December 31, 2023, was 55.6$428,222 thousand, compared to $435,392 thousand for the same period in 2022, reflecting a decrease of approximately 1.5$277.3 million, compared to $244.4 million for the same period in 2022, an increase of$32.9 million[168] Expenses and Investments - Research and development expenses increased to $73,880 thousand in Q2 2023, up from$69,874 thousand in Q2 2022, indicating a focus on innovation[11] - Selling, general, and administrative expenses for the six months ended December 31, 2023 increased to $445.0 million, a 10$404.9 million for the same period in 2022[148] - Research and development expenses for the six months ended December 31, 2023 increased to $149.6 million, a 12$133.1 million for the same period in 2022[153] - The company incurred restructuring expenses of $64.2 million during the three months ended December 31, 2023, compared to no restructuring expenses in the same period of 2022[51] - The company incurred$110,688 thousand in business acquisitions during the six months ended December 31, 2023, compared to $1,011,225 thousand in the same period of 2022[22] Cash Flow and Liquidity - Cash flows from operating activities for the six months ended December 31, 2023, were$559,115 thousand, significantly higher than $173,298 thousand in the same period of 2022[22] - Total cash and cash equivalents at the end of the period were$210,247 thousand, down from $253,199 thousand at the end of December 2022[22] - The company had$955.0 million available for drawdown under the revolving credit facility as of December 31, 2023[72] - Cash provided by operating activities was $559.1 million for the six months ended December 31, 2023, an increase of$385.8 million compared to $173.3 million for the same period in 2022[179] - Cash used in investing activities was$190.1 million for the six months ended December 31, 2023, a significant decrease of $895.1 million compared to$1,085.2 million for the same period in 2022, primarily due to the acquisition of MEDIFOX DAN in 2022[180] Assets and Liabilities - Total assets as of December 31, 2023, were $6,905,088 thousand, an increase from$6,751,708 thousand as of June 30, 2023[8] - Total liabilities decreased to $2,423,234 thousand as of December 31, 2023, from$2,621,805 thousand as of June 30, 2023[8] - Stockholders' equity increased to $4,481,854 thousand as of December 31, 2023, compared to$4,129,903 thousand as of June 30, 2023[8] - As of December 31, 2023, total debt amounted to $1,226.7 million, a decrease from$1,441.1 million as of June 30, 2023[66] Dividends and Share Repurchase - The company declared a dividend of $0.48 per share for Q2 2023, up from$0.44 per share in Q2 2022[11] - The company declared dividends of $141,275 thousand for the six months ended December 31, 2023, compared to$128,931 thousand in the same period of 2022, representing an increase of 9.4%[22] - The company paid cash dividends of $0.48 per common share totaling$70.7 million during the three months ended December 31, 2023[182] - The company has repurchased a total of 7.5 million shares for an aggregate of $462.7 million since the share repurchase program began in 2014, with 335,474 shares repurchased at a cost of$50.0 million during the six months ended December 31, 2023[183] Legal and Regulatory Matters - The Patent Trial and Appeal Board invalidated all challenged claims in the patents asserted by New York University against ResMed in December 2023[83] - ResMed's petition challenging the validity of U.S. Patent No. 10,076,269 was denied by the PTAB, but the decision is pending reconsideration[87] - The first trial in the patent infringement cases filed by Philips against communications module defendants is set for April 1, 2024[86] Market and Economic Conditions - The company is exposed to inflationary pressures that may adversely affect operating results, particularly in maintaining gross margin and operating expenses[205] - A hypothetical 10% change in interest rates would not have had a material impact on pretax income for the three months ended December 31, 2023[204]